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Monday, November 25, 1996 Iomega was up $1/2 Friday, closing at $22 (+2.33%). TODAY'S RECAP: If you're looking for news on Iomega's showing at Comdex, you've come to the right place. A series of posts by ~Robra~ gives us a fascinating picture of the spectacle of this event, starting off with a conversation with Iomega's CEO, Kim Edwards. Check out posts 11++ through 14++, inclusive, below. And here's a note brought to our attention by our Department of Crop Circle Studies, Yeti Sightings, and Paranormal Phenomena: On Friday, the *22nd* day of the month... Iomega closed at exactly *22* dollars per share. Coincidence? Um, well... yeah, probably... INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.) -- or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOM Today window and try again.
1++Perros reports on Iomega's high visibility at Comdex thanks to its
brightly-colored bags. And now, the Best of the Board...Started 3 am ET 11/22/96. 1++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Comdex visibility Date: 96-11-22 04:20:55 EST From: Perros
Probably not of much interest now, and I'll leave it to others to decide the impact, if any, but it seems to indicate the savvy of the IOM marketing team.
In my view, Iomega got, perhaps, more bang for visibility buck than any company at comdex this year. I was looking at people's bags trying to roughly gauge company bag frequency. (If you don't know, other than only Microsoft, I think, a bag in someone's hand means they visited that site). Microsoft won hands down, of course, and I don't really know where Iomega ended up, although, very probably in the top ten. Possibly much higher, but I can't be sure because my sampling was so swayed by the visibility of the bags. They were huge, bold yellow bags with a large, red Iomega logo, and they were VISIBLE! They were made of paper, so they held a boxy shape and you could see and read them from a mile. I was really struck by how much they stuck out in a sea of roving advertisements. Come across a bunch of people sitting down, and you had mounds of limp, indistinguishable plastic lying on the floor among a bunch of large, upright, bold Iomega bags. Made me wonder why other companies weren't doing it. Poor guys at Syquest had to fade these things either staring at them from the presentation audience or constantly swarming through the exhibit like a plague of locusts. ( I genuinely felt for 'em, they were really trying).
Personally, with no marketing experience, I'm not real confident that it makes much difference in their total business, but if visibility was a valuable commodity at Comdex this year, considering their floor location and booth size (good), presentation impact (very good) and roving visibility throughout the complex (unmatched), Iomega made a huge return on investment.
Shorts will ignore it. Some longs will say, "big deal, the stock didn't go through the roof so who cares". This post is for the other people.
Perros 2++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Listening to the customers? Date: 96-11-22 04:51:25 EST From: TrashMonqi
Is Iomega listening to their customers and responding to the godawful problems so many of us have had with the Zip drives? There is currently no evidence that they are. I am one of the many poor fools who took to heart the media hype about how easy and reliable the Zip was. I waited a long time to get one so the early bugs would shake out. I heard positive comments from friends who were lucky enough not to need any tech assistance with their Zips. So I finally bought one, a parallel port drive, Win95 flavor.
It's been a nightmare. I've been in the tech end of the software field for two decades, and this is one of the most frustrating experiences I have ever had. The "easy and straight forward" installation was that, all right, in the sense that the information supplied with the product was "one, two, three" with the assumption that everything would work without difficulty. If, in fact, that was not the case, the literature was absolutely of no help. Furthermore, the developers of the product package assumed that the burden of more detailed tech support would be shouldered by the retailer. Well, that assumption has been dashed by Iomega's decision to distribute the Zip as a commodity product through outlets such as Costco, from which no support whatsoever is available. Frustrated, I called the Iomega help lines, which, as anyone who has done so can tell you, are not functional, unless you have nothing else in life to do but sit on hold. Of course, Iomega offers the option to pay a rather stiff price for "going to the head of the line" and actually having a person answer the phone sometime this century. Like many other customers, I was angered by the arrogance of a company expecting me to pay an open-ended amount of extra money for the pleasure of maybe getting their product, for which I had already paid like anyone else, to actually work.
So, I turned to the tech support board of AOL. I suggest that every current or potential Iomega advisor spend 15 minutes looking through the posts there. It's a horror story of growing dimension, a swelling wave of truly pissed-off customers. One can dismiss this unpleasant fact (as one of the posters here has) by saying that Iomega is no more awful in the tech support area as the others. That is scant comfort to me. One can also say that's it's "sooooo obvious" that there is no realistic alternative to the Zip for those of us who have portability needs unsatisfied by the old floppy or other means. However, if the damn product doesn't work, or breaks whenever one changes the PC environment, it's useless, and a customer is forced to try whatever else works. Furthermore, the time and money wasted on this product is an experience that will be shared with as many other people as possible, 'cause it really hacks you to be sold a bill of goods by a high-flying company smugly touting it's product expertise and its Wall Street clout.
As an investor, if you think Iomega can long continue its initial success once the positive buzz is soured by the growing legions of ignored and dissatisfied customers, then get out your checkbook and put on your blinders.
It's soooooo obvious. 3++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: silence is golden Date: 96-11-22 09:00:59 EST From: Bigfootmm
a recent post: >>>I don't know about you but I'm playing with real money. When I buy stock, I own part of the company. ( If you day trade you buy stock). When I lose money, it's my money, IOM does not mail me a benefit check. I don't care if its dung or zips, as long as people want it and it makes money and more and more people want it..more than any other dung in town. Don't fool yourself... you didn't buy this stock for the dividend..you bought it to appreciate in value quickly.<<<
These comments bring up the reasoning behind the idea that a company should not pay all that much attention to shareholders. Heresy? Not at all. If shareholders want their stock to rise to full value, they must let the company do it's job. The company that is eager to please shareholders can only do that in the short-run. In the long-run, a company must maintain and possibly increase its competitiveness (R&D spending), it must position itself correctly with consumers (marketing costs), and it must put out a quality product at a reasonable price (manufacturing costs). All of these cost could be reduced for the benefit of EPS, and the next quarters financial report might set off a rally. However, are those profits real if they ultimately damage the company's ability to exist?
Shareholders are *very* often concerned about getting the price of a stock up ASAP. That is not a good strategy for a company. The Board of Directors, executives and other employees of a company have much more at stake than do outside shareholders and are the forces that protect the company from the foolishness of over-emphasizing the bottom line at the expense of the long-term health of the company.
In Iomega we have much to look forward to as the company's management takes care of business. Management has already proven itself to be excellent, and until that changes we can be happy stockholders.
This quarter is a marketing game and we can readily see that Iomega has let out the horses. Are there any companies out there that can compete with Iomega? Really compete? Syquest is about out of business, HP lost most of its tape business, Epson looks like it is throwing in the towel trying to sell Zips under its own label (an example to show the increasing value of Iomega's brand name), the LS-120 is still not on the scene and is rapidly running out of time to head the Zip off, even if it ever could being slow and more costly and with only a dubious advantage, and Swan hasn't the marketing experience nor money that Iomega has, and is way late as well.
I know that some here have said that the Zip is not the standard yet and not to count out the competition. Since attending the annual meeting I have not seen the standard as anything but a fait accompli... *if* the marketing is effective. With the management, head start, alliances, OEMs, along with the quality and price of Iomega's products, the company can dictate what it will give up to competitors and what it will keep for itself. Iomega's homework (marketing) told it to sell the LS-120 technology, not to make Zips backward compatible, and to demonstrate to other manufacturers that it is serious about bringing prices down even when it could charge more. And it did this price cutting even while many stockholders were screaming for stock price support.
That $100 million dollar war chest Iomega has sitting there is not for nothing. It is there to make Iomega known far and wide. KE has been brilliant all the way and there is not a reason in the world not to keep on thinking that he will produce value over the long run. That is so unless, of course, you are a player who could care less about what happens to the company and just want your money to multiply now so you can play again in some other venue. The less the company listens to the players, the better off the rest of us will be.
Regards, Bigfoot 4++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: 4th million NOT! Date: 96-11-22 12:08:20 EST From: IOM man
I am a long time bull of IOM and have been following this board for over a year and a half. You all know me very well. I have changed my screen name for this post to protect my identity.
I think sales of Zips may be slowing big time. I have been concerned for quiet some time now. The reason for my concerns are not from gut feelings or hunches but from the information the company itself releases. Or should I say the lack of information. What I mean by this is, WHERE IS THE "4 MILLIONTH DRIVE SOLD" ANNOUNCEMENT??????? If it had been sold already don't you think it would have been announced at Comdax?
This is what I believe is happening. At first Zips were flying off the shelves. There were alot of people who had a tremendous need for large capacity floppies. Everyone who needed one got their hands on one in a hurry. But then, what happened? July and August were slow, even with a rebate! Please don't give me any of this "summers are slow" crap. If the demand was there they would have sold, summer or no summer. September showed an increase. My guess is many retailers ordering for the upcoming holiday season, if not, surely October sales would be for Christmas. Here it is the end of November and still no 4 millionth announcement! This does not sound very encouraging for a investment that needs to continue forward to justify todays stock price.
I know I will get flames stating "just because it hasn't been announced doesn't mean it hasn't been sold"! When the company announces the 1st, 2nd and 3rd, one would think KE would be eager to tout the 4th, especially considering the slow 3Q sales. Yet it hasn't been announced during xmas shipping season! It wasn't announced at an event where it would, could, and should have been announced if it had happened, Comdax.
Many on this board are using at 5 mill sold in their projections, some even 6 mill. I think you may want to consider a lower number and get used to the idea of IOM's recent weakness.
If this is true, what do you think Zip sales, or earnings will be like in Jan?
Other concerns 1. IOM has been down almost every day since moving to the NYSE. 2. IOM has gone down despite news of n.hand 3. IOM has been going down despite great exposure at Comdax 4. IOM has failed to participate in recent market rallies. 5. Market will surely take IOM with it when it corrects. 6. Pressures from last chance tax loss selling on IOM will start next week
This does not look like a stock that is going up anytime soon. I am very seriously considering selling the rest of my entire position. Maybe you too should consider at least taking some profits.
IOM man 5++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Competition& Corporate Sales Date: 96-11-22 13:01:00 EST From: EBLUESTONE
If nothing else, KE has demonstrated the importance of brand awareness and market share dominance. It will be very difficult for Syquest, Swan/Mitsumi, et al, to get retail shelf space, if IOM can achieve another quarter or two of blowout sales.
Having said this, however, the danger for IOM is that Io marketing management, will rest on their laurels, believe in their own PR, start to count their money, and tend to their own personal wealth. Meanwhile, the LS120 and Swan/Mitsui will enter the corporate market, with backward compatibility opening the doors, and Io management, without the experience and the stomach to sell technology to the more profitable corporate market, will be caught napping just as Io caught the hard drive manufacturers (Seagate, Quantum, and WDC) napping while Io took the consumer removable disk drive storage market.
The consumer gadget (n.hand, et al) market will belong to IOM, as long as Iomega can preempt and completely dominate the high-end and low-end of the removable disk drive storage market. This means that they have to successfully compete in the corporate market place.
IMHO, if IOM does not show (soon) their intentions and competence to compete in the corporate market place, the real savvy institutional investors are going to be uncomfortable investing in IOM.
FWIW
MAC 6++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: 4 millionth NOT! Date: 96-11-22 16:25:34 EST From: IOM man
Other signs that Zip drive sales are slowing
1. Iomega terminated manufacturing agreement in the philippines. Yes I know they were ramping production elsewhere. But, IF IOM was selling all the Zip drives they could, they would not have shut down ANY manufacturing facilities!
2. Continuation of rebate. Q) Instead of offering a rebate, why didn't KE just drop the price of the Zip drive. A) So he could sell the drive at $200 again sometime in the future right? Common sense will tell you it was his original intention to offer a rebate for 3rd Q (original time frame) then back to $200 during the hottest selling season of the year. It didn't happen this way. As it turned out KE extended the "rebate" through Xmas season. If he could get $200 for the drive at this time it would be happening right now and you know it!
3. The number of OEM's offering internal Zips. I find it hard to understand why only a few OEM's are offering an internal Zip in there machine for Xmas season. Only a few offer internals period! If the demand was there IOM could have produced enough internals for OEMs during the period of July and August when it was apparent drive sales were slowing. I doubt it was a case of not being able to supply all the drives the OEM's needed. KE was quoted as saying it was his goal to be inside the boxes. If that was his goal either he couldn't meet it or the demand wasn't there this season. With July and August being as slow as it was I can only assume the demand wasn't there from the OEMs either.
Again let me reiterate that if the 4th millionth drive hasn't been sold by now there is no way 5 million will be sold by the end of the year. And that would have serious implications on the valuation of this stock.
IOM man 7++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Apple Rep Date: 96-11-22 17:41:08 EST From: Spiritman
Last night in Poughkeepsie NY at a meeting of "THE INFO RIVER VALLEY" which is an organization to promote a tech resource directory and develop the Hudson river valley into a Silicon Valley of the East......
there were 2 APPLE reps ,
one of which did a 2 hour first class presentation of what is coming to the Web- 3D, and multimedia, multi track voice and text, etc .......ANYWAY......when he got done , as the discussion turned to the hardware he was using and the Macs that will be coming out at 500mz next year, I asked him if Zip and Jaz will be offered on the new Macs.......
I got an AFFIRMATIVE REPLY with the explanation that the reason that it has taken so long is that they wanted to do exhaustive testing on them before they offered them so they could stand behind them confidently!!!
Spiritman :) 8++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:4 millionth NOT! Date: 96-11-22 19:45:46 EST From: PKeeler
>>> 1. Iomega terminated manufacturing agreement in the phillipiens. Yes I know they were ramping production elsewhere. But, IF IOM was selling all the Zip drives they could, they would not have shut down ANY manufacturing facilities! <<<
Your characterization is off base. Iomega BOUGHT the manufacturing in the Philippines essentially. It was moved to Iomega's facility in Malaysia. If Zip demand is crumbling why would Iomega take manufacturing upon itself? Makes more sense to just tell Epson to not make so much. Costs lots of money to shut down plants, much more than to not buy stuff. How about this for bullish spin: Maybe Epson could not make any more Zips because the Philippine facility was maxed out. Iomega could have made more in Malaysia but it doesn't pay to make a few. So instead they transferred the entire Epson operation and have added on, bringing economy of scale. IOM Man, I would like an answer to this question:
If Zips are not selling and will not sell anymore, why would huge companies like Intel, Texas Instruments, and Motorola reserve precious manufacturing capacity for Zip chip manufacturing? Intel can't deliver enough 200 Mhz Pentium Pro processors but they are making Zip chips.
To all the posters who criticize IOM Man for not signing his name, I think that's shortsighted. Did he have valid questions? Could they be answered? I have heard that other people who have asked reasonable questions have gotten threatening email and worse. I wonder if Tom Gardner got any threats via email last night for his Portfolio write-up?
If any post has a question about Iomega going forward and all I can read is people making fun of the spelling mistakes, I would be very scared. The best posts use to be responses to that idiot Diomega. I think some of the best posts recently are responses to some of MF Ben's thoughts. BTW, I'd like to thank MF Ben for taking Comdex week off so that, in the spirit of Comdex, hype could be spread unimpeded! ;-) As you can see, Ben's absence had no positive effect on the stock.
PKeeler Patrick Keeler
P.S. While I'm on my soapbox, I'd like to caution not only the huge numbers of shorts but any "longs" that hold Iomega on margin today. The fall from $55 to $14 was not the doing of the shorts (check short interest in June/July vs. today), but of greedy, wishful, or naive "longs" who had to sell on margin pressures. Some of the brightest people I've ever met (virtually) were posting on this board and were long in May 1995 but got creamed because of margin. I can remember in May when Tom Gardner posted in here about using margin on a stock like IOMG and he was viciously flamed. Buy with cash and look out to the introduction of n.hand cameras next Summer. Boring but very effective... 9++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Microsoft & more Date: 96-11-23 18:48:33 EST From: Cynicalguy
I didn't go to Comdex on Friday due to boredom and paleness. The sun was way too strong to miss one day by the pool. However, this day proved to be as fruitful if not more than any other. In the gym at the Mirage hotel, I saw a guy wearing an Iomega t-shirt. When I asked him how he got the t-shirt, he told me he worked for Microsoft and Iomega gave him the shirt at their first meeting. Of course, this piqued my interest. I probed him further. (don't touch that!)
He went on to say that Microsoft and Iomega were working on a deal that would bundle two products together. I won't post what the products are, for fear of giving the competition an advantage. He also went on to say the following things: "Microsoft and Iomega are working together on 6 or 7 different projects." He went on to say, "I think there is a 90% chance that the zip drive will replace the floppy." The most interesting comment for someone with his knowledge was, "If I had any cash, I would invest it in Iomega right now." He also mentioned that Iomega treats them very well in their meetings, (like giving them all t-shirts at the first meeting), and that this company (Iomega) has a great future ahead of it.
I took a little trip to Roy, Utah today. They are still working 24 hours a day, 7 days a week. It is awesome to see the Zips and Jaz flying off the belts. In terms of any Jaz problem, I have now verified that the return rate is extremely minimal.
If you happen to be watching the Jazz/Bulls game tonight, look for the Iomega billboard on the court. While your eyes are on the court, look for me in the front row, next to the Jazz bench, with my Iomega shirt on. ; )
Bill Bronsteen Cynicalguy 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Swan & Io in the News Date: 96-11-23 19:24:49 EST From: Rum Doodle
Two interesting articles just out with news relating to Iomega:
The first, from *Electronic Buyer's News,* 11/25 issue, details the infighting and disagreements between Swan and Mitsumi executives.
"SWAN, MITSUMI ALLIANCE SEEMS FRAYED," by Mark Hachman, portrays an alliance that "no longer appears to agree on much of anything." It points to the "long delayed" high density floppy as a source of quarrels between the two companies, who plan to release the product in Q3 97.
The article also says that Swan has decided to forgo the high-volume PC floppy market "for the untapped - and largely nonexistent - consumer space." "We're well aware of the PC drive market," said Eden C. Kim, president and chief executive of Swan, Santa Clara, Calif. "But there's a whole market of consumer appliances - Web TVs, smart phones, GPS systems - that demand a mass-storage solution like our 3160 UHC drive."
It quotes Mitsumi executives as being wary of Swan's aggressiveness. It also says that analysts are puzzled by Swan's design of the Swan 3260, "which mounts a removable 130-Mbyte disk over a fixed disk of the same capacity."
"I don't understand the reason behind it," said Phil Devin, vice president and chief analyst for storage at Dataquest Inc., San Jose. "Those extra heads and media are the most expensive part of the drive."
The second article, from *Computer Reseller News,* 11/25, is a whimsical look at Comdex, and how Iomega bags proved more popular than "porn pamphlets."
"Some things just have more Zip," says the correspondent.
Check both articles out by searching Iomega at http://www.techweb.com/techweb/techweb.html 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Comdex - Discussion W/ KE Date: 96-11-23 23:31:34 EST From: Robra
<<<Maybe if I re-post this I can stir some support for expediting the follow-up. Surely, there are many others who are as interested as I ?>>>
OK Perros, I'll do the follow-up.
I'll start with my discussion with Kim Edwards. I was at the Iomega booth minutes after the exhibit floor was opened Monday morning. One of the first people I saw as I approached the booth was the CEO himself. As I waited to speak to him, he suddenly walked briskly toward the rear of the booth. He disappeared from view and I thought I had missed my opportunity. I was looking at the numerous displays in the booth several minutes later when I spotted him up on the second level that others here have posted references to. I decided to go up and approach him again (I wasn't sure if I would be welcome up there, but I figured, hey, what the heck, I'm a stockholder!).
KE was in a discussion with 3 others. I caught his attention and introduced myself as being a stockholder for the past 18 months. He was very cordial. The shirt I was wearing had the name of the corporation I work for on the front. This was of interest to him since the CEO of the company I work had come from GE and was the #2 man at GE when KE was also there. After establishing that I did work there, he asked if I knew "Larry". I'm in a company with something like 75,000 employees worldwide and "Larry" is located on the other side of the U.S. from me. If it hadn't been a CEO asking me if I knew "Larry" I would be sure they were kidding me with this question. In my company, only the highest levels of senior management have an opportunity to meet with our CEO.
During the conversation, I covered 2 areas with KE. I tried to determine the degree of support Iomega had from the potential OEMs with the n.hand product. He explained that it was too early to formally develop these OEMs since at this stage Iomega was developing the technology and development of OEM relationships would occur as development of the technology progressed to the Product Development (as opposed to Technology Development) stage. I was not able to determine the specific level of support this project has from potential OEMs, but with the marketing savvy the "new" Iomega has demonstrated to this point, I am comfortable they have done their homework.
The second concern I raised was that I felt the current analysts' estimates of 18 cents (doubling from last quarter) was a bit aggressive for this point in time. I asked for his feeling on this and he told me that I could appreciate, as a stockholder, that Iomega does not give guidance on these types of issues. I responded by telling him that their conservative stance on issues like this, and the fact that Iomega does not "hype" or create unobtainable expectations is one of the primary reasons I am so comfortable remaining a stockholder.
IMO Iomega has made enemies on Wall Street by not "spoon-feeding" them with this and other strategic info but I am willing to experience the repercussions of this in the short term in exchange for the long term benefits.
I think I would have done a better job of coming up with questions for KE if I'd have known he would be this accessible. One thing that impressed me about KE was that with all he must have had going on at the beginning of the show, I feel I had 100% of his attention throughout our conversation. I walked away with the feeling I'm sure many others have of him that he is a man that is focused, knows his business, and is DRIVEN to accept nothing less than first place.
Robra 12++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Comdex - n.hand Display Date: 96-11-23 23:33:06 EST From: Robra
Someone posted a report of the n.hand display being off in a corner with not much interest. I find both of these claims to be untrue. The display was located in the in the middle of the floor towards the front of the booth as you walk in the front entrance. And as far as little or no interest, that individual must have been at the display after closing time. Iomega had 2 marketing employees stationed at the display. These guys were swamped with questions every time I walked past the Iomega booth. Around 11:00 or 12:00 when I stopped to look at the display, one of the Iomega guys at the display, Bill Tolson (Marketing Manager, New Technologies), was busy answering mine and 2 other individuals' questions (on his half of the display), while also being interviewed by some one from the media as a photographer leaned in to shoot photographs. The area was total chaos. I had a real belly laugh when someone posted that there was little interest.
Robra 13++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: COMDEX - Mitsumi & LS-120 Date: 96-11-24 02:47:06 EST From: Robra
The arrangement of the booths was at 1 end of the floor, were MSFT, HP, Apple, NEC, AST, SONY, FUJI, Acer, Iomega, and IBM. On the other end of the floor were Mitsumi and Syquest.
Mitsumi
Displayed in the Mitsumi booth was the 130MB UHC. As I posted previously, they were displaying an internal that was playing a rather good quality video clip. As far as I can tell, there will be/is only a internal IDE version available. As I was talking to the Mitsumi rep demonstrating the unit, someone behind me asked him for a spec sheet. The Mitsumi rep replied to him something like "hey, you're from Iomega". The guy from Iomega pointed out to him that he had ID and an Iomega pin identifying him with Iomega and that he was not trying to hide the fact. At this point, the Mitsumi rep handed he and I the spec sheet. The Mitsumi rep then introduced him, by name (George Krieger), as the man that invented both Zip and Jaz. I introduced myself to George as an Iomega stockholder. He asked the Mitsumi rep if he could examine the cartridge from the drive and the rep pointed out that the cartridge eject button had a temporary hard plastic shield installed to prevent the ejection of the cartridge while at the show. I asked about OEM announcements, but received vague answers. BTW, the specs of the UHC portion of the drive are <23msec track-to-track access time, 3.06 MB/sec transfer rate, 3600 RPM, and 2700 tracks/inch density. The 1.44 portion is 500 Kb/sec transfer and 300 RPM.
At this point George and I broke into a side discussion about Iomega and competing drives. Without any prompting from me, George emphasized that Iomega had done extensive research that showed backwards compatibility was not an issue.
LS-120
The Maxell booth was demonstrating the LS-120. The Maxell rep was touting the increased floppy speed over conventional floppy drives. When I asked him about speed comparison of LS-120 with Zip (knowing ahead of time the LS-120 is 40% slower), the Maxell rep claimed LS-120 to be faster. He then did a demo (which seemed really slow to run) showing a transfer rate of 650 Kb/sec. Throughout my discussion with him he seemed to be using LS-120 120MB specs vs. LS-120 Floppy specs when comparing LS-120 vs. Zip. Obviously, misstating the facts like this puts LS-120 in a favorable light. I asked about OEMs, but again received vague answers.
The Panasonic booth also had several versions of LS-120 on display (including slim-line for Laptops) and all were under-glass and looked non-functional.
George mentioned the selling of the LS-120 technology previously by Iomega. My recollection of Iomega on this was the 21MB Optical was as far as Iomega had taken the technology prior to selling it. The biggest surprise to me during our conversation was that Iomega had developed a working prototype 120MB version PRIOR to selling the technology. In fact, George said he still has the prototype in his possession. This tells me that Iomega made an even more informed decision when they sold the technology than I had previously realized.
Robra 14++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: COMDEX - Syquest & Apple Date: 96-11-24 02:50:19 EST From: Robra
Syjet 1.5
Someone earlier posted the Syquest booth had little activity. While the Syquest booth is much smaller than Iomega's I found there to be significant activity at their booth. Another thing I noticed was that alot of the people visiting the Syquest booth were carrying those bright yellow Iomega bags.
While George and I were standing in front of the Syjet 1.5 and Zip drive on display, a Syquest rep asked George and I if she could answer any questions and George, like in the Mitsumi booth, asked her for a spec sheet on the Syjet 1.5. She left to get one. While she was gone, George pointed out the clear plastic label that Iomega applies to the window of the Zip drive. He said he had it added to protect the Zip window in shipment. He also mentioned that 90% of Zip drives he sees in service still have this sticker on. He peeled off the sticker from the Zip as he spoke. This example of attention to detail is something I doubt the competitions' drives experience.
I asked George if they knew about the Syjet upgrade from 1.3 to 1.5. He said they knew a couple months before Syquest announced it, but thought the 1.5 would be in addition to 1.3, not replace it entirely.
I mentioned to George that I had heard rumors that Iomega might announce the 200MB Zip at Comdex. George looked at me without saying anything. I came right out and asked him if this was going to happen. George just kept right on looking at me (as if to say, you should know better than to ask stuff like that). George would not answer the question directly, but while gesturing at the Zip, said "all I can tell you is that our objective is to make that a standard". I am pleased that every Iomega employee I spoke with holds sensitive and strategic information close to the vest.
When the Syquest rep returned with the spec sheet for Syjet, she told George that she was told by her co-workers who he was. She also said that apparently, she was the only one in the booth that didn't realize who he was. As in the Mitsumi booth, George stated that he was in no way trying to conceal who he was.
Apple
As I was passing through the Apple booth, a rep asked me if he could answer any questions. So I asked him when they would include Zip drive. He said something like "don't tell anyone I told you, but it will be by 1Q". I demonstrated extreme skepticism because it has taken so long. He then stated that there were alot of technical issues to be worked out before they could be included in Apple and everything was almost resolved. He stated several times throughout the conversation "don't tell anyone I told you". I walked away from the booth feeling that I couldn't believe any of the info I had just received.
Overall, I feel I covered alot of ground considering I was only there for 1 day. I hope the time I've spent typing all this stuff will maybe give some good insights to the show.
Robra 15++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: only the paranoid survive Date: 96-11-24 04:17:28 EST From: Steve24601
I just read Only the paranoid survive by Mr Grove of Intel and would like to share my thoughts with this board. He describes the six forces the affect a business - in no particular order - (1) the power, vigor, and competence of existing competitors; (2) the power, vigor, and competence of compelementors; (3) the power, vigor, and competence of customers; (4) the power, vigor, and competence of suppliers; (5) the power, vigor, and competence of potential competitors; and (6) the possibility of substitution. With respect to Iomega, let's see...(I'll exclude n.hand until I see the product at my local Computer City) (1) existing competitors - Jaz and Zip - just look over at Syquest's board. Or at how long it has taken LS-120 to come to market. Or how we now have a "swan under glass" - a new non-alcoholic beverage, perhaps :)?? Ditto - I'd worry more here with exabyte, connor, and HP in the ring, but Iomega had market share growth in a non-growing market, so this kind of performance speaks for itself (2) compelementors (ie gasoline to cars) Jaz and Zip - the internet, scanners, graphic artists, digital music composers, anything with massive data requirements Ditto - continued growth in hard drive size (3) customers Jaz and Zip - the fax effect - one fax machine is virtually useless. two is better, but millions of fax machines makes the fax machine worth more as a whole. the same applies here. LS-120/swan/syquest will have to face this problem as they struggle to market Ditto - ??? (4) suppliers Jaz and Zip (and ditto?) - the dream team, need I say more? a significant barrier to entry to this market (5) potential competitors none on the horizon, except for those mentioned in (1) (6) substitution CD-W? too slow. DVD - linear and not random access. what else is there?
comments??
BTW, a channel check at computer city at kapolei (the biggest on Oahu) zips are everywhere along with HP Pavillon w/built-in zip. Jaz had a good display. No Syquest ezflyer disks in display case (makes it hard to sell a syquest if you can't get disks). No LS-120 in compaqs. no swans (I guess its not a native bird.... : )) at the newly opened Circuit city, big on Jaz/Zip/Ditto (most of the upstairs back wall) - not many boxes, but good exposure. and no syquest/LS-120/swan/etc to be seen. 16++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Real Competition for IOM? Date: 96-11-24 13:05:53 EST From: DILLIGF
The Swan / Mitsumi drive shown at Comdex in its current form does not represent competition to Io. It does represent competition to the LS120.
The following are offered as specific reasons for the above statement.
1. The level of electronic board integration presents a product which was one or two development levels beyond bread box design. Relatively no circuit integration present. The present design on a scale of 1 to 10 is no better than a 10 ( with 10 being the lowest). As a comparison current Zip is at a 5 or 6 level with level 2 or 3 achieved in first half of '97. To have a chance in the market place heavy subsidies will be required to gain market acceptance initially with major R&D commitments to achieve reasonable levels of integration and substantial time 12 to 18 months.
2. OEM's that have committed to Zip will not be inclined to offer two separate options especially when Zip has achieved a good level of acceptance.
3. The nature of the drive as well as cost does not lend it to the retail external drive market. The backward compatibility feature is not a marketing benefit.
4. The backward compatibility market is limited at present and will become more so as software is distributed on the WEB and by CD Rom and with a number of Laptop manufactures offering removable floppies with external connection capabilities Swan or the LS120 would have to offer substantial cost savings to encourage adoption but more importantly will be required to demonstrate a strong and growing installed base of users. The installed based will most likely be the biggest issue.
5. The LS120 can not compete with the S&M drive on either access or transfer rates. If there is a nitch market for the backward compatible market S&M will win. 17++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: LS-120 - vs. PP Zip Date: 96-11-24 23:21:38 EST From: RFM1941
Interesting to read several posts over the last couple of days, proclaiming that the LS-120 is only 40% of the speed of the Zip, and therefore, is not a competitive threat. What's been left out is that this comparison relates the LS-120's speed to ONLY the SCSI Zip, which is the fastest version of the drive. In terms of access speed and data throughput, the LS-120 is very competitive with the Parallel Port Zip.
Of course, IO has never published numbers on the proportion of total Zip drive sales accounted for by the PP model, but anyone who has done channel checks regularly knows that the PP version accounts for a very large portion of total sales, probably 50% or more.
Actually, knowing the exact proportion of PP Zips to total Zip sales is not that crucial. The point is that to an important degree the total market penetration achieved by the Zip drive to date (somewhere in excess of 3.5 million drives) has been accomplished through the sale of a version of the Zip the performance of which is readily matched by the so-called slow LS-120. Thus, when the LS-120 is evaluated versus the PP Zip, the truth is that performance is essentially equal, with the LS-120 offering the additional advantage of backward compatibility.
Any of you who think this is not relevant, should ask yourselves the following question. Could Iomega have achieved anything close to the current overall market penetration of the Zip, if consumers truly were very sensitive to speed differences, and had rejected the PP Zip (as is asserted will be the case with the LS-120)? The answer is obvious, as is the fact that the failure to make comparisons on this board between the LS-120 and the PP Zip, is a deliberate attempt avoid telling the whole story. 18++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:n.hand COMDEX Date: 96-11-24 23:23:30 EST From: MF Logman
From the same Chicago Tribune web site that Paul (PPUSTELNIK) pointed us to, here's a little snippet of their COMDEX coverage:
<< It's not every day that a high-technology firm benefits from misinformation, but Iomega, maker of the popular Zip and Jaz drives that store megaloads of information, was besieged by reporters eager to know what happened at a special Monday morning announcement they all seemed to miss.
An official Comdex schedule included mention of the news conference, and an AOL chat room was abuzz over the weekend with speculation about what new product would be announced.
"There was no press conference," one Iomega spokesperson said with a smile. "But the rumor has been a great way of getting reporters over to our booth." >>
Logman :) 19++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:LS-120 - vs. PP Zip Date: 96-11-24 23:54:49 EST From: Arentz65
<<RFM1941
Interesting to read several posts over the last couple of days, proclaiming that the LS-120 is only 40% of the speed of the Zip, and therefore, is not a competitive threat. What's been left out is that this comparison relates the LS-120's speed to ONLY the SCSI Zip, which is the fastest version of the drive. In terms of access speed and data throughput, the LS-120 is very competitive with the Parallel Port Zip. >>
So your going to compare an internal LS with an External PP Zip? Whats the point of that? The LS will probably never be seen as an External unit. So you should compare Internal drives. Also you happened to forget about the IDE Zip, which is just as fast as the SCSI.
<<The point is that to an important degree the total market penetration achieved by the Zip drive to date (somewhere in excess of 3.5 million drives) has been accomplished through the sale of a version of the Zip the performance of which is readily matched by the so-called slow LS-120. >>
The important point, is that those people buying the PP Zip were trading speed for ease of installation and portability. What exactly are LS users getting in exchange for the slow speed of their drive? Backward compatibility? once you transfer files over to a high capacity disk, how often are you going to use those old floppies?
<<Could Iomega have achieved anything close to the current overall market penetration of the Zip, if consumers truly were very sensitive to speed differences, and had rejected the PP Zip (as is asserted will be the case with the LS-120)?>>
It's called a choice. Iomega gave consumers the an overlapping choice between speed and ease of use. Some were willing to give up speed for ease of use. Others wanted speed. What choices does the LS give consumers?
ea
End Report. Posts covered through 3 am ET 11/25/96. _______________________________
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